When you get right down to it, I was both right and right about the SpaceX (NASDAQ: SPCX) IPO.
Right, because I predicted SpaceX IPO fever could drive space stocks higher. Indeed, shares of lunar landing company Intuitive Machines (NASDAQ: LUNR) gained 71% over the past four months.
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That’s the good news. I was also right, unfortunately, about what would happen on the IPO date. And this in a nutshell is why Intuitive Machines stock fell 10% through 11 a.m. ET today.
Three scenarios for SpaceX and space stocks
Four months ago, I ran down three theories for how the SpaceX IPO could potentially play out, both for SpaceX itself and for the other space stocks in this nascent industry. Briefly, these potentialities went like this:
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Option 1: SpaceX IPO fever could make space stocks more popular, driving up their stock prices.
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Option 2: SpaceX could make space stocks not named SpaceX less popular, if they suffered by comparison to SpaceX, which is so much bigger and more profitable than SpaceX’s competitors.
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Or Option 3: Investors wanting to buy SpaceX stock might sell shares of other space stocks to raise cash to buy SpaceX instead.
What’s next for Intuitive Machines
The fact that Intuitive Machines stock went up so much over the past four months means I was right about Option 1. The fact that Intuitive Machines stock is selling off today — the same day investors are presumably preparing to pay for their new SpaceX IPO shares — strongly suggests I was right about Option 3.
And Option 2? This remains to be seen. SpaceX’s IPO prospectus made clear SpaceX isn’t nearly as profitable as we once believed. Bigger isn’t necessarily better, and tiny Intuitive Machines could still be a winner if it turns profitable before SpaceX does.
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